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Last Updated : Dec 21, 2018 09:04 AM IST | Source: Reuters

US, allies slam China for economic espionage, spies indicted

The United States, Britain, Australia and New Zealand slammed China over what they called a global campaign of cyber-enabled commercial intellectual property theft, signalling growing global coordination against the practice.


The United States and three allies condemned China for economic espionage on Thursday as American prosecutors charged two Chinese nationals tied to a spy agency in a wide-ranging cyber campaign that stole confidential data from US government agencies and businesses, fanning tensions with Beijing.

US authorities unveiled indictments charging Zhu Hua and Zhang Jianguo in hacking attacks against the US Navy, the space agency NASA and the Energy Department as well as companies in numerous sectors. The operation targeted intellectual property and confidential business and technological data to give Chinese companies an unfair competitive advantage, they added.

The United States, Britain, Australia and New Zealand slammed China over what they called a global campaign of cyber-enabled commercial intellectual property theft, signalling growing global coordination against the practice.


"No country poses a broader, more severe long-term threat to our nation's economy and cyber infrastructure than China," FBI Director Chris Wray said at a news conference. "China's goal, simply put, is to replace the US as the world's leading superpower, and they're using illegal methods to get there."

Secretary of State Mike Pompeo and other officials in President Donald Trump's administration said China's hacking effort, which US officials said began in 2006 and ran through 2018, violated a 2015 agreement intended to crack down on cyber espionage for commercial purposes.

Britain agreed. The campaign is "one of the most serious, strategically significant, persistent and potentially damaging set of cyber intrusions against the UK and our allies that we have seen," a British security official said.

US authorities said hacking targets included NASA's Goddard Space Center and Jet Propulsion Laboratory, the Energy Department's Lawrence Berkeley National Laboratory and companies involved in aviation, space and satellite technology.

The targets also included companies involved in banking and finance, telecommunications, consumer electronics, manufacturing technology, pharmaceutical technology, oil and gas exploration and production technology, communications technology, computer processor technology and maritime technology, they added.

"The list of victim companies reads like a who's who of the global economy," Wray said, though he did not name specific businesses.

The US action may worsen tensions between Washington and Beijing after the arrest of Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei Technologies , in Canada at the request of the United States.

The charges were announced just weeks after the United States and China agreed to talks aimed at resolving an ongoing trade dispute that threatens global economic growth. US Treasury Secretary Steven Mnuchin told Fox Business Network he did not think the charges would affect the trade talks, calling it a "separate" matter.

US authorities said the two defendants, who worked in China in association with a Chinese intelligence agency known as the Ministry of State Security, were charged with conspiracy to commit computer intrusions, conspiracy to commit wire fraud and aggravated identity theft.

Zhu and Zhang were members of a hacking group known within the cyber security community as Advanced Persistent Threat 10, or the APT10 Group, US authorities said. The defendants worked for a company in China called Huaying Haitai Science and Technology Development Company, or Huaying Haitai, they said.

The Chinese efforts targeted more than 45 commercial and defence technology companies in the United States, as well as managed service providers (MSPs) - firms to which they outsource email, storage and other computing tasks - and their clients, US officials said. The defendants compromised the data of MSP clients in 12 countries, they said.

NASA said it did not believe agency missions were jeopardized by the hacking and took immediate action to secure affected servers. China's embassy in Washington did not respond to a request for comment. The Navy referred questions to the FBI.


Australian officials issued a statement expressing "serious concern" about Chinese commercial intellectual property theft. An official in New Zealand said in a statement the country "joins likeminded partners in expressing that such cyber campaigns are unacceptable."

Canada, Japan, the Netherlands and Sweden also were expected to denounce Chinese cyber efforts, according to a source who spoke on condition of anonymity.

"It is a sign that the United States is building an international coalition to hold China accountable for its egregious behaviour," said Dmitri Alperovitch, chief technology officer of cyber security technology company CrowdStrike.

The Chinese campaign is considered a major threat by private-sector cyber security researchers and government investigators because of the scale of the intrusions.

Beginning in about 2014, the APT10 Group engaged in a campaign to get unauthorised access over an extended period of time to computers and computer networks of MSPs for businesses and governments around the world using malware to steal user names and passwords of employees, US authorities said.

APT10 also stole personal data including Social Security numbers from more than 100,000 US Navy personnel, they said.

Over the past several years, as globally companies have sought to reduce information technology spending, they have increasingly relied on outside contractors to store and transfer data. When a managed service provider is hacked, it can unintentionally provide attackers access to secondary victims who are customers of that company and have their computer systems connected to them, according to experts.

"China's state-sponsored actors are the most active perpetrators of economic espionage against us, in short, to strengthen themselves and to weaken the United States," Wray said.

This is the latest in a series of hacking cases brought by the United States against alleged Chinese hackers.

In October, the US government charged Chinese intelligence officers with conspiring with hackers and company insiders to break into private companies' computer systems and steal information on a turbo fan engine used in commercial jetliners. The same month, the Justice Department arrested an alleged spy for China's Ministry of State Security on charges of economic espionage and attempting to steal US aviation trade secrets.

In September, a Chinese national who had enlisted in the US Army Reserve was arrested in Chicago for working for Chinese intelligence to recruit engineers and scientists, including some who worked for US defence contractors.
First Published on Dec 21, 2018 09:00 am